how can new businesses reduce
employer payroll taxes?
New businesses or start-up companies may be eligible to apply the federal R&D tax credit against their payroll tax for up to five years.The R&D credit was permanently extended as part of the Protecting Americans from Tax Hikes (PATH) Act of 2015. It includes some enhancements starting in 2016, including offsets to alternative minimum tax and payroll tax for eligible small businesses. Eligible Small Businesses can elect to take the R&D credit on their payroll tax reports, beginning in the quarter after the 2016 corporate tax return is filed. The new payroll tax election allows companies to receive a benefit for their research activities regardless of whether they are profitable.